Transcript Simon Gresham - Society Of Local Council Clerks

Contract Management
Presentation by
Simon Gresham
About Me
• 30 years working in contracting environment
• Started in catering
• Worked on first local authority compulsory
competitive tendering
• Moved on to market testing of central government
services
• Worked on major accommodation PFIs
• Advisor to a range of clients and contractors
• Now advise on small and large procurements mainly
covering facilities management
• Live in Norfolk
Contract Management
Why?
“ Even the best outsourcing contract means
nothing if its contents are forgotten,
milestones are missed or obligations are not
tracked or compliant to agreed service levels”
2012 report on global outsourcing
Contract Management
A Definition
“The management of contracts made with
suppliers, customers, partners, or
employees”
Contract Management
“Contract management is the process of
managing contract creation and execution for
the purpose of maximising financial and
operational performance and minimising
risk”
Wikipedia
Contract Administration
“ The processes and practices that underpin
the contract management function – the
monitoring of quality and cost,
administration of the invoices, paperwork,
purchase orders”
Contract Management
How many of you actively manage your
contracts?
What success stories do you have?
What disasters/nightmares have you had?
Current Contracting
Agenda?
• Drive for savings
• Local services passed down to Town/Parish Councils
• More outsourcing of non core/back office services to
save money
• Debate – in house or private sector – which is best?
Are there alternatives?
Current Local Authority
Agenda?
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Joined up services
Linking with other Authorities
Joint Ventures
Greater use of the voluntary sector (The Big Society?)
More resident involvement/views
More reporting – greater visibility and accountability
Current Parish/Town
Council Issues
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Standing orders being reviewed
Updates in contracting procedures
Difficulties finding contractors
Too many contractors?
Deciding who to invite – shortlisting
OJEU
TUPE
Specifications and documents
Evaluation of bids
Do you have any current issues?
Contract Management
Ground Rules
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Be clear about the process you are adopting
Be clear about Standing Orders and internal Council processes
Involve the right people in the Council
Examine the feasibility
Gather the user’s requirements so that you get want you want
Make sure you get something back from the supplier that
shows they can deliver and for what price
• Evaluate the proposals on a like for like basis
• Manage the arrangement once you have agreed it
The Overall Process
Before you go out to contract, seek quotations or
tenders
Feasibility
study
What could
we do?
Competition
Strategy
Project
Plan
How could we
do it?
What is our
plan?
The Overall Process
Going out to contract, seeking
quotations/tenders
Procurement
Strategy
How do we
go about it?
Specification
or Brief
What do we
want?
The
Competition
*External Bids
*In-house Bids
Let us see what is
on offer?
Evaluation
The Overall Process
After you have gone out to
contract and selected a provider
The Client Side
Are we set up to
manage it?
Contract
Administration
Let us now
manage it?
Implementing
the partnership
Let us see how
well we did?
The Project Plan
Determine
Service
Requirements
Produce
Specification/
Brief
Evaluate
proposals
Receive
proposals
Clarification
with first
choice
Award the
Contract
Advertise the
Service/Supply
Receive
Expressions of
Interest (PQQ)
Issue
Invitation
to Tender/
Quote
Shortlist
Providers
Start the
Contract
Manage
the
Contract
Mobilisation Activities
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Staffing and communications (TUPE)
Recruitment and training
Pricing and payments
Contractual and relationship (reporting)
Assets and infrastructure
Implementation (may be over time rather than
immediately)
Managing the Contract
What do you need to make it work?
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A clear specification
Sensible hand-over arrangements
Effective communications
Recognition of teething problems
Managing the Contract
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Clairvoyant contractors do not exist
Ill informed clients tend to get annoyed
Avoid the ‘them’ and ‘us’ mentality
Be consistent
Avoid personality clashes
Develop the relationship
Specifications
• Input versus Output
• Can you ever achieve a totally output based
approach?
• What do contractors think?
• What are your ‘Imperatives’?
• If you go for an output approach, do you
accept the risks?
Contractor Monitoring
Onus on the Contractor to monitor their own
performance
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Completion sheets
Handheld recording
Sign offs from the client/customer
Photographic proof
Response times
Rectification approach and timescales
Client Monitoring
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Checks that contractor records are correct
Random sampling approach
Get customer feedback
Monitor complaints
Focus groups
Reporting
• Monthly report
• Report against KPIs
• Client review meeting
Example Report Contents
Quality
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Quality Audit scores
Remedial work
Response times
Periodic tasks
Customer complaints
Customer surveys
Example Report Contents
Workforce
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Attendance
Absence
Training
Recruitment
Staff turnover
Uniforms
ID and Vetting
Discipline/Grievance
Workforce surveys
Example Report Contents
Health, Safety and Environment
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Accidents/incidents
Safety audits
Risk assessments
Fire safety
Safety training
COSHH
Recycling
Environmental activities
Example Report Contents
Management, Reporting and Administration
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Management information
Financial performance
Cost reduction
Invoicing
Contract variations
Financial Management
• Depends on pricing mechanism
– Lump sum – invoice for one twelfth per month
– Unit prices – invoice against pricing schedule
• Need to reconcile against activity
• Need to manage “overs” and “unders”
• Payment tied to performance - defaults
mechanism
Change
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Change control mechanism built into contract
Basis of pricing change
Business cases
Client led decision making
Mechanism and escalation process
Failure
• Default mechanism in the contract
– 3 strikes and you are out?
– Match to Key Performance Indicators
– Dialogue
– Evidenced based
– Escalation process
• Ability to earn back service credits
Example KPIs (Grounds)
KPI
Area being measured
KPI
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Health and Safety
Robust grounds maintenance safety systems are in place and are compliant with
legislation and good industry practice
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Health and Safety
Staff equipped to carry out the tasks required including safety wear and safety systems
and safe equipment
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Health and Safety
Managers hold valid advanced health and safety certificates
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Health and Safety
Staff hold valid standard health and safety certificates and equipment use certificates
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Grounds Maintenance Service
Equipment, materials and other resources required for the provision of the grounds
maintenance services are provided in accordance with the Specification
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Grounds Maintenance Service
Grounds maintenance carried out at the times stated in the Specification as shown by the
sign offs made by the grounds maintenance staff after completion
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Grounds Maintenance Service
Grounds maintenance carried out to the standards set in the Specification as shown by
the sign offs made by the grounds maintenance staff after completion
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Grounds Maintenance Service
Reactive maintenance carried out in accordance with client requirements
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Grounds Maintenance Service
Equipment, materials and plants provided in accordance with the Specification
Example KPIs (Grounds)
KPI
Area being measured
KPI
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Staff
Staff are attired in appropriate uniforms
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Staff
Staff are CRB checked
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Staff
Staff training plan in place and training being carried out
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Staff
Staff training records are up to date at all times
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Finance
Financial records are maintained in accordance with the Specification
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Reporting
Client’s reports are submitted in accordance with the Specification
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Customer Surveys
Customer surveys are carried out six monthly and results are discussed with client
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Grounds Maintenance Strategy
Grounds Maintenance Strategy prepared and discussed with client annually
Success
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Partnership principles
Balanced scorecard
Innovation
Gainshare
Social responsibility
Apprenticeships
Successful Contract
Management
“ Even the best outsourcing contract means nothing
if its contents are forgotten, milestones are missed
or obligations are not tracked or compliant to
agreed service levels”
2012 report on global outsourcing
“ The aim must be to develop a partnership with
your contractor which is mutually beneficial and
long lasting”
Simon Gresham
Contract Management
Clinic – Your Questions Answered?
For further information about Contract Management or Contracts and Tenders please
feel free to contact Simon Gresham on [email protected] or 07798
623750